Indian rupee snaps five-day fall as shares, euro gain

* Rupee ends at 53.82/83 per dlr vs 53.85/86 on Tues

* Rise in exports gives temp boost; trade deficit still a
concern

* INR may hold in 52.85 to 54.25 band in the near term -
trader

By Swati Bhat

MUMBAI, Feb 13 (Reuters) - The Indian rupee strengthened on
Wednesday, snapping a five-day losing streak, helped by gains in
domestic share markets and the euro, and as the trade deficit
did not widen as much as some analysts had feared.

Although India posted its second highest ever monthly trade
deficit at $20 billion in January, that was well below market
expectations of closer to $25 billion, as exports rose 0.8
percent from a year earlier.

Still, not all analysts were comforted by the data, given
the prospect it would weigh on the current account deficit, an
indicator the central bank has previously said would be factored
into its monetary policy.

Traders are bracing for wholesale price inflation data on
Thursday. A Reuters poll expects the WPI to hit a three-year low
of 7 percent, a number below the 7.5 percent that Reserve Bank
of India Governor has previously called as "too high".

"Euro, positive stock market and a long weekend in most of
Asia supported the rupee," said Paresh Nayar, head of fixed
income and forex trading at First Rand Bank.

"Trade deficit figures are however very bad. Hopefully,
February will be better but definitely India needs good inflows
for filling this gap and so far foreign fund inflows have been
helping."

Nayar said he expects the rupee to hold in a range of 52.85
to 54.25 in the near term.

The partially convertible rupee closed at 53.82/83
per dollar versus its previous close of 53.85/86.

Shares rose for a second consecutive session on
Wednesday, while the euro edged up against the dollar as
traders cited demand from Middle East buyers.

Continued dollar demand from oil firms also helped support
the rupee.

Traders said the upcoming foreign investor debt limit
auction of over $11 billion on Feb. 20 is also likely to boost
the rupee with most of these funds likely to flow in before the
sale date.

In the offshore non-deliverable forwards the
one-month contract was at 54.09 while the three-month was at
54.69.

In the currency futures market, the most-traded near-month
dollar/rupee contract on the National Stock Exchange, the MCX-SX
and the United Stock Exchange all closed at around 53.96 with a
total traded volume of $4.22 billion.
(Editing by Anand Basu)

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